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Signs of a cooling house market after the Stamp Duty buying frenzy?
Original Author: Marc Shoffman
Yet more signs are emerging of a slowing property market as Halifax’s latest house price index revealed both the smallest quarterly and annual increase for five months during April 2016.
The lender’s figures show prices in the three months to April rose just 1.5% and were up 9.2% year-on-year to £212,321.
House prices fell by 0.8% between March and April, so combined with February’s 1.5% fall this has offset March’s 2.2% gain.
The report does show that agents were busy with home sales in March at 165,480, the highest monthly total since Halifax started recording the data in April 2005. However, other data showed that the number of transactions in March was particularly distorted by the Stamp Duty deadline.
Sales in the first three months of 2016 were also 32% higher year-on-year, helped by that rush to beat the new charges, according to the index.
Martin Ellis, Halifax housing economist, said dipping consumer confidence was keeping the market down.
He said: “The annual rate of growth eased from 10.1% to 9.2% in April. Both the quarterly and annual rates are at their lowest since last autumn.
“Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months.
”Weakening sentiment regarding house price prospects and a dip in consumer confidence, however, suggest that annual house price growth may ease.”
Responding to the data, Jonathan Hopper, managing director of Garrington Property Finders, said: “April was the morning after the Stamp Duty stampede, and the property market clearly awoke with a sore head.
“The frothy exuberance of March now seems a distant memory, as the market returns to normality with a bump.
“Starved of the Stamp Duty stimulus, double-digit annual price rises are unlikely to return any time soon.
“However, the sudden cooling of the market may mark an opportunity for buyers, as some sellers are being forced to reassess their overly ambitious asking prices.”
